1. LINE

      Text:AAAPrint
      Economy

      Monetary easing to boost growth: expert

      1
      2015-06-29 08:30Global Times Editor: Li Yan

      1st simultaneous rate, RRR cuts in 7 yrs

      China's decision to cut both interest rates and banks' reserve requirements ratio (RRR), effective Sunday, will help stabilize the economy and send a positive signal to the capital and property markets, experts said.

      The People's Bank of China (PBC), or central bank, slashed both its one-year deposit and lending rates by 0.25 percentage points. It also lowered the RRR, the amount of reserves banks are required to hold, by 0.5 percentage points for banks with sizable lending to rural areas, agriculture as well as small and micro businesses.

      In a statement on Saturday, the central bank said that the cuts were aimed at lowering borrowing costs and stabilizing growth.

      "Stabilizing growth is the fundamental reason behind the rare move of cutting interests rates and the RRR at the same time," Zhou Jingtong, a senior analyst at the Bank of China, told the Global Times Sunday.

      The last time the central bank cut both interest rates and the RRR on the same day was in December 2008, when China's GDP growth slowed to 6.8 percent in the fourth quarter of that year from 9 percent the previous quarter amid the global financial crisis.

      "Although some economic indicators for May have showed signs of stabilizing, the Chinese economy still faces downward pressure, and social financing costs are still high," Zhou said.

      The cuts lowered deposit and lending rates to 2 percent and 4.85 percent, respectively.

      The central bank said it chose to make a targeted RRR cut instead of a universal RRR cut because the banking system still enjoys ample liquidity following an overall RRR cut in April.

      "The targeted RRR cut also reflects the efforts of central authorities to adjust the economic structure," Zhou said.

      The targeted RRR cut is expected to inject 470 billion yuan ($75.7 billion) into the economy, China Merchants Securities estimates.

      "This is not surprising given that real activity indicators remain weak in April and May, and show that China's economy may have missed 7 percent growth in the second quarter," Liu Ligang, chief China economist at ANZ Banking Group, wrote in a note.

      The National Bureau of Statistics is scheduled to release second-quarter and half-year GDP figures in July. The Chinese Academy of Social Sciences (CASS), a government think tank, said on Friday it projects that China's GDP growth will slow to 6.93 percent in the second quarter from 7 percent in the first quarter.

      CASS said in a report that a batch of government support policies will gradually take effect starting the third quarter and help the Chinese economy achieve its annual growth target of around 7 percent.

      The rates and targeted RRR cuts will also help stabilize the equity market, analysts said.

      China's A-shares market saw its biggest one-day drop in seven years on Friday, with the benchmark Shanghai Composite Index dropping by 7.4 percent and the smaller Shenzhen Component Index also falling by 8.24 percent.

      "The move will help regain investor confidence, and avoid systemic financial risks brought by heavy selloffs," said Zhu Zhenxin, an analyst at Minsheng Securities. "The market will remain bullish but at a slower pace."

      Compared to uncertainties in the stock market, the housing market will benefit more from the central bank's move, Yan Yuejin, research director of Shanghai-based E-house China R&D Institute, told the Global Times Sunday.

      He said the latest interest rate cuts mean a home-buyer who takes out a 20-year loan of 1 million yuan will be paying 141 yuan less every month.

      "The cuts will also lower the funding costs of property developers, stimulate home sales and lower the inventory of unsold houses," Yan said.

      China's housing market has showed signs of recovery this year after a downturn in 2014, backed by several interest rates cuts and support measures.

      Analysts said they expect more monetary easing measures in the second half of the year.

      Liu said he believes the central bank will cut the RRR by another 1 percentage point before the end of the year if capital outflow matches the first quarter's pace.

      China's inflation rate is likely to stay at 1.5 percent in 2015, so there's still room to lower interest rates in the second half, analysts at China Merchants Securities said.

      Related news

      MorePhoto

      Most popular in 24h

      MoreTop news

      MoreVideo

      News
      Politics
      Business
      Society
      Culture
      Military
      Sci-tech
      Entertainment
      Sports
      Odd
      Features
      Biz
      Economy
      Travel
      Travel News
      Travel Types
      Events
      Food
      Hotel
      Bar & Club
      Architecture
      Gallery
      Photo
      CNS Photo
      Video
      Video
      Learning Chinese
      Learn About China
      Social Chinese
      Business Chinese
      Buzz Words
      Bilingual
      Resources
      ECNS Wire
      Special Coverage
      Infographics
      Voices
      LINE
      Back to top Links | About Us | Jobs | Contact Us | Privacy Policy
      Copyright ©1999-2018 Chinanews.com. All rights reserved.
      Reproduction in whole or in part without permission is prohibited.
      主站蜘蛛池模板: 亚洲人成无码网站| 精品久久久久亚洲| 国产日韩一区二区三免费高清| 免费观看的av毛片的网站| 亚洲视频小说图片| 在线看片免费人成视频久网下载| 国产免费人成在线视频| 亚洲高清有码中文字| 18禁黄网站禁片免费观看不卡| 亚洲精品国产成人片| 一级成人a免费视频| 免费在线观看亚洲| 亚洲色成人四虎在线观看| 91精品视频免费| 久久久久亚洲av无码专区喷水| a级毛片黄免费a级毛片| 亚洲综合最新无码专区| 日日狠狠久久偷偷色综合免费 | WWW国产亚洲精品久久麻豆| 青青视频观看免费99| 亚洲精品国产情侣av在线| 一区二区三区四区免费视频| 亚洲国产精品无码久久一线| 中文字幕在线视频免费| 亚洲性久久久影院| 丰满妇女做a级毛片免费观看| 免费大片在线观看网站| 看免费毛片天天看| 国产aa免费视频| 精品亚洲成A人在线观看青青| 国产乱人免费视频| 国产亚洲精彩视频| 国产伦精品一区二区三区免费下载| 亚洲国产综合AV在线观看| 午夜a级成人免费毛片| 亚洲妇女无套内射精| 国产精品久久免费视频| 国产精品国产亚洲区艳妇糸列短篇| 国产麻豆免费观看91| 风间由美在线亚洲一区| 无码欧精品亚洲日韩一区夜夜嗨 |